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[LF.Anastasia]

CHF: Swiss Franc has reached new highs and is still strong

At the Forex currency market Swiss Franc rate has reached historic highs once again yesterday – now it is at the level of 0.8552, and continues to have strong position amid ambiguous market sentiments.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and goes down, maintaining a pair sell signal. Stochastic Oscillator remains in the oversold zone today, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8550 the pair USD/CHF will go to 0.8535.

The head of the National Bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and disrupts tourism industry; therefore negative impact of the CHF can be stronger than predicted. “We intend to take any measures to achieve price stability” stressed monetary politician.

According to him, downside risks to recovery are still preserved, although economy demonstrates more steady growth rate than previously expected.
Statement made by Hildebrand that long term expansionary monetary policy constitutes a menace to some industrial sectors is worthy of being noted.
Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

It also became known earlier that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February. Franc has ignored this statistics.
The data released earlier showed that real retail sales in Switzerland decreased by 0.2% in March against the growth by 1.8% in February. In addition index SVME – PMI in Switzerland fell to 58.4 points in April against the previous level of 59.3 points.

 

[LF.Anastasia]

JPY: Japanese Yen is getting stronger day by day

The Japanese Yen rate continues to gain strength at the Forex currency market on Thursday because investors are shifting from risky positions to the safer assets. Although markets in the Country of the Rising Sun will only open tomorrow after the “Gold Week”, the Bank of Japan keeps watch on the situation and is prepared to respond.

Forex forecast: MACD indicator for the pair USD/JPY crossed the signal line from top to bottom, giving a pair sell signal. Stochastic Oscillator has come back to the oversold zone, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 80.30 the pair will go to 80.10 and 79.90.

We would like to emphasize again that Current growth of the JPY was caused by purely external factors and has nothing to do with the internal situation in the country.

As it became known earlier, the Bank of Japan has not changed interest rate, leaving it at the level of 0.1% per annum. Japanese data released after that was also mixed: unemployment rate remained at the previous level of 4.6% in March; preliminary data on industrial output fell by 15.3% m/m in March against the growth by 1.8% m/m in February; net CPI decreased by 0.1% y/y in march which became the 25th fact of reduction in a row; household spending decreased by 8.5% y/y in march against the previous decline by 0.2%.

The head of the Bank of Japan Mr. Shirakawa said earlier that following the results of quarters I and II, it can be expected that level of GDP will decline due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.

Japan considers the possibility of raising taxes up to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

Note that the Bank of Japan believes that real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.

 

[LF.Anastasia]

AUD: Weak statistics has spurred sales of Australian Dollar

At the Forex currency market the Australian Dollar rate continues to fall on Thursday, affected this time by the negative reaction of the economists on the Australian statistics, released this morning.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it moves along the signal line, although trading volumes are still high. Stochastic Oscillator goes down in the neutral zone and is giving a pair sell signal.

Forex recommendations: in case of breakdown at the level of 1.073, levels of 1.0710 and 1.0690 will become the target of decline.
The following Australian statistics was released today:

– Retail sales fell by 0.5% m/m in March against the growth by 0.8% in February;
– Number of construction permits rose by 9.1% m/m in March against the decline by 5.3% in February.

Stress of the economists was caused by the data on the retail sales: the indicator went down because sales in the department stores and super markets had been reduced. Interestingly that it is happening during long period of discounts in many stores.

It became known yesterday that sale of new houses in Australia increased by 4.3% m/m in April, as per HIA estimates versus preliminary expectations of growth by 0.6% m/m. In addition, index of business activity in the service sector of Australia rose to 51.5 points in April, as per estimates of AIG/Commonwealth Bank, against the previous level of 46.5 points. However, the AUD disregarded this statistics.

According to the data released last week CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate.

Kevin Rood, Minister of Foreign Affairs in Australia said earlier that RBA has no plans to carry out currency intervention, although national currency is considerably overvalued.

As it was made public earlier, index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia keeps interest rate unchanged for a long time. Leading indicators index demonstrates good growth in the Australian economy: indicators show that growth is unlikely to be too high next year; however there will be some growth.

The Reserve Bank of Australia decided to leave interest rate at the previous level of 4.75% per annum. At the same time the RBA was not too eloquent in the follow up comments – and this was the indication for investors to start sales.

The RBA has maintained the rate unchanged for the fifth meeting in a row; the last fact of monetary policy tightening took place in November 2010.

 

[LF.Anastasia]

NZD: New Zealand Dollar was supported by the news from employment sector

The New Zealand Dollar grows up at the Forex currency market on Thursday the cause of optimism was suddenly evoked by the employment sector and the report on the unemployment rate for QI.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD however it started to decline, giving a pair sell signal. Stochastic Oscillator falls in the neutral zone today , approaching oversold zone and is giving a pair sell signal.

Forex recommendations: correction can enable the pair to go up to 0.7950/60, however if “bears” are back in the market, sales target will be the level of 0.7900.

It became known today that unemployment rate New Zealand fell to 6.6% in QI against the level of 6.8% in QIV, 2010. The forecast had been 6.7%.
In addition the proportion of labor force increased to 68.7% against the previous level of 67.9%.

Although indicators are favourable, ASB still believe that report is ambiguous: it is possible that the earthquake of February will have more serious impact on the economy than expected and it will have additional pressure on the labor market of New Zealand and will have an adverse affect on the prospects for the sector as a whole.

It became known on Tuesday that Monetary Authorities of New Zealand decided to expand program to purchase assets up to NZD20 billion. The data released at the end of last week showed that trade surplus in New Zealand rose to NZD464 billion in March against the level of NZD194 billion in February. The level of trade surplus was substantially above the forecast of 200 billion, which is a positive indication for the economy. Export amounted to NZD4.53 billion last month against the forecast of 4.20 billion and imports totaled 4.07 billion versus to the expected 3.90 billion.
In addition, macro-statistics showed that level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates, against the level of +8 points in QIV.

According to the decision of the Reserve Bank of Zealand, made at the meeting last Thursday, interest rate was left unchanged, at the level of 2.5% per annum. The head of the RBNZ Mr. Bollard stressed that interest rate is not supposed to be changed so far. Regulator pointed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy. Macro-statistics released this week showed that construction permits in New Zealand rose by 2.2% m/m in March against preliminary forecast of decline by 9.7% m/m.

 

[LF.Anastasia]

Euro/USD: Euro tries to rehabilitate after yesterday’s sales

The pair EUR/USD is almost standing still at the Forex currency market on Friday morning after yesterday’s collapse.

By 9.10 Moscow time the Euro is at 1.4550 against closing session level of 1.4537 yesterday.

The outcome of the European Central Bank meeting has become the reason for the massive sales of the Euro on Thursday: the rate was left at the previous level of 1.25% per annum, while the head of the ECB, Trechet noted that it is necessary to monitor the economic situation in the region very carefully, thereby bringing down hopes of the market for the interest rate rise in June.

Now, observers believe that the rise in rate should not be expected until the middle of the summer. This information caused the collapse of the major pair for almost three figures in the middle of the session already.

The day is going to be eventful in terms of statistics from Eurozone and its countries as well as from the USA.
Most likely the pair EUR/USD will not go beyond the range of 1.4500-1.4650 at the trading session on Friday.

 

[LF.Anastasia]

GBP: British Pound is being purchased after massive sales

At the Forex currency market the British Pound tries to grow on Friday after three days of massive sales.

Forex forecast: MACD indicator is in the positive area for the pair GBP/USD, however it started to decline; trading volumes are also reducing, which is an indication of a pair sell signal. Stochastic oscillator has come in the oversold zone, maintaining a pair sell signal.

Forex recommendations: upward correction can lead the pair to 1.6450. However, when “bears” are back, the target of sale will be the levels of 1.6380 и 1.6350.

At the meeting yesterday the Bank of England decided to leave interest rate unchanged at the level of 0.50% per annum, volume of assets purchase was also kept unchanged- at the level of stg200 billion. Comments of the regulator did not contain any new development, and this seems natural; the situation in the British economy is far from being stable.

Deloitte & Touche LLP believes that the Bank of England will not raise rates until 2013 – according to observers, economic growth in the country is still poor, basic economic trend in the UK is also not too good, which encourages to leave rates at the current level at least until the end of this year and throughout the next year as well. Inflation in the country is twice as high as 2% projected by MPC. Deloitte & Touche LLP indicates that British GDP will amount to 1.5% in 2011, the same as next year; while inflation will reach 4.5% in 2011 and 1.8% in 2012.

According to the rating agency S&P the rise in the interest rate can be expected in the next three months. “It is caused by the fact that inflation level will to rise again after the decline in March and it can reach the level of 5% in QIII.” –stated lead economist of the agency J-M Six..

The head of the Bank of England Mervyn King believes that the rise in the interest rate can exacerbate problems of national debts. Such statement can be well regarded as support to “dovish” sentiments in the Monetary Committee.

The data released last week showed that consumer confidence in Great Britain increased to 44 points in March, as per Nationwide study, against the level of 39 points in February. At the same time index of expenditure rose to 66 points versus the previous level of 53; expectation index went up to 66 points against the 51 previously. Therefore, confidence index in the UK has moved away from the lows, which is a positive factor for the British economy. The data released today showed that CPI in Great Britain grew by 0.3% m/m (+4.0% y/y) in March. Sterling sluggishly responded to this statistics – for over a year inflation in the UK has been considerably higher than the significant level of 2% to which the Bank of England adheres.

 

[LF.Anastasia]

CHF: Swiss Franc has been corrected

At the Forex currency market Swiss Franc rate is consolidating slightly on Friday after yesterday’s correction when investors were filled with sympathy for the USD.

Forex forecast: MACD indicator is in the negative area for the pair USD/CHF and goes down, maintaining a pair sell signal. Stochastic Oscillator is growing in the neutral zone today, giving a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 0.8690 the pair USD/CHF will go to 0.8710 and 0.8735. If the level of 0.8650 is exceeded, traders’ target will be the level of 0.8620.

The situation in the economy of Switzerland has not changed fundamentally, external background puts the main pressure on the pair.
Real level of retail sales in Switzerland increased by 1.5% m/m in February against the decline by 2.4% m/m in January; level of CPI in Switzerland rose by 0.6% m/m (+1,0% y/y) in March against the forecast of growth by 0.2% m/m. It is an ambiguous factor for Swiss economy as on the one hand the economy strengthens and on the other hand it suffers from significant inflationary pressure.

It became known earlier that consumption indicator UBS in Switzerland rose to 1.660 points in March against the revised level of 1.453 points in February; while volume of export in Switzerland fell by 4.8% m/m in March against the level of +3.6% m/m in February. Franc has ignored this statistics.
The data released earlier showed that real retail sales in Switzerland decreased by 0.2% in March against the growth by 1.8% in February. In addition index SVME – PMI in Switzerland fell to 58.4 points in April against the previous level of 59.3 points.

The head of the National Bank of Switzerland, Mr. Hildebrand noted that strong and expensive Franc undermines exports and disrupts tourism industry; therefore negative impact of the CHF can be stronger than predicted. “We intend to take any measures to achieve price stability” stressed monetary politician. According to him, downside risks to recovery are still preserved, although economy demonstrates more steady growth rate than previously expected. Statement made by Hildebrand that long term expansionary monetary policy constitutes a menace to some industrial sectors is worthy of being noted.

 

[LF.Anastasia]

JPY: Japanese Yen started to move away from local highs

The Japanese Yen rate started to go down at the Forex currency market on Friday because negative factor at the global capital markets affects even “safe” currencies.

Forex forecast: MACD indicator for the pair USD/JPY has crossed the signal line from top to bottom, giving a pair sell signal. Stochastic Oscillator tends to go out of the oversold zone, and started to form a pair buy signal.

Forex recommendations: off the market.

Feasible event scenario at Forex: in case of breakdown at the level of 80.50 the pair will go to 80.75 and 80.90. If the level of 80.30 is exceeded, traders’ target will be the level of 80.10.
Markets in Japan are opened today, for the first time after “Gold Week”.
In general the situation in the economy of the Country of the Rising Sun remains almost unchanged.

The head of the Bank of Japan Mr. Shirakawa said earlier that following the results of quarters I and II, it can be expected that level of GDP will decline due to the serious aftermath of the earthquake in March. He thinks that the main problem is the shutdown of the production facilities, which in any way or other is connected with the power failure. Shirakawa believes that as soon as the power supply will reach the level of 11 March, production capacity will be restored. At the same time Central Bank is still ready to take measures to support economy, if required.

Japan considers the possibility of raising taxes up to 15% of the sales tax from the current 10%. It became known earlier that surplus of trade balance amounted to Y196.5 billion in March against the level of Y931.94 billion a year earlier; tertiary index rose by 0.8% m/m in February against the fall by 0.1% in January - Japanese economy had really expanded, at least before the earthquake in March. Meanwhile, the level of export decreased by 2.2% y/y in March, while level of import increased by 11.9% y/y which is logical.

Note that the Bank of Japan believes that real GDP will rise by 0.6% this year against the forecast of growth by 1.6% in January.
As it became known earlier, the Bank of Japan has not changed interest rate, leaving it at the level of 0.1% per annum. Japanese data released after that was also mixed: unemployment rate remained at the previous level of 4.6% in March; preliminary data on industrial output fell by 15.3% m/m in March against the growth by 1.8% m/m in February; net CPI decreased by 0.1% y/y in march which became the 25th fact of reduction in a row; household spending decreased by 8.5% y/y in march against the previous decline by 0.2%.

 

[LF.Anastasia]

AUD: Australian Dollar likes the RBA’s position

At the Forex currency market the Australian Dollar rate grows up steadily after yesterday’s sales.

Forex forecast: MACD indicator is in the positive area for the pair AUD/USD, however it started to decline, and is prepared to form a pair sell signal. Stochastic Oscillator pushed away from the oversold zone and begins to rise in the neutral zone, giving a pair buy signal.

Forex recommendations: in case of breakdown at the level of 1.0710, the levels of 1.0730 and 1.0750 will become the target of purchase. If a steady upward breakdown does not take place, the pair will consolidate close to the current levels.

Today, the Reserve bank of Australia outlined its vision of the prospects for the national economy. Thus, next year the RBA will announce measures to reduce government costs in order to restore budget surplus. If the program is implemented it will help Australia to maintain GDP growth, which has been observed over the past 20 years and to curb inflation.

On 10 May Finance Minister Swan will announce details of the program. The situation is still complicated with respect to the interest rate: most probable that Prime Minister Julia Gillard will oppose the tightening of monetary policy, since the rise in the rates will create additional obstacles for the RBA. However the RAB is also set to increase interest rate because the boom in the mining sector triggers the growth of inflation, although at the same time contributes to maintaining stability in the employment sector.

Stress of the economists was caused by the data on the retail sales (-0.5% m/m against the growth by 0.8% in February): the indicator went down because sales in the department stores and super markets had been reduced. Interestingly that it is happening during long period of discounts in many stores.

According to the data released last week CPI in Australia increased by 1.6% on quarterly basis (+3.3% y/y) in QI. Therefore, inflation in the Green Continent has reached five-year highs; natural disasters have triggered the rise in costs for food and other consumption goods for people. In addition, commodity prices at the global markets remain high, because tension in the Middle East does not abate. RBA expects that net CPI will reach 3% against predicted 2.75% by the end of this year.

As it was made public earlier, index of import prices increased by 0.9% on quarterly basis in QI. Index of leading indicators rose by 4.7% y/y in March against the rise by 4.8% in February. It is a good result taking into account that the Reserve Bank of Australia keeps interest rate unchanged for a long time.

 

[LF.Anastasia]

NZD: New Zealand Dollar tries to regain its growth

At the Forex currency market the New Zealand Dollar rate is growing on Friday, regaining from sales of the last four days.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and started to decline, starting to give a pair sell signal. Stochastic Oscillator pushed away from the oversold zone today and resumed its growth, giving a pair buy signal.

Forex recommendations: correction can enable the pair to go up to 0.7900/20, however when “bears” are back at the market, the target of the sales will be yesterday’s lows of 0.7815.

Economic situation in New Zealand has not changed significantly this morning.

It became known yesterday that unemployment rate New Zealand fell to 6.6% in QI against the level of 6.8% in QIV, 2010. The forecast had been 6.7%. In addition the proportion of labor force increased to 68.7% against the previous level of 67.9%.

Although indicators are favourable, ASB still believe that report is ambiguous: it is possible that the earthquake of February will have more serious impact on the economy than expected and it will have additional pressure on the labor market of New Zealand and will have an adverse affect on the prospects for the sector as a whole.

According to the decision of the Reserve Bank of Zealand, made at the meeting last Thursday, interest rate was left unchanged, at the level of 2.5% per annum. The head of the RBNZ Mr. Bollard stressed that interest rate is not supposed to be changed so far. Regulator pointed in the follow-up comments that high rate of the New Zealand Dollar is undesirable, since it has a negative impact on the economy. Macro-statistics released this week showed that construction permits in New Zealand rose by 2.2% m/m in March against preliminary forecast of decline by 9.7% m/m.

It became known on Tuesday that Monetary Authorities of New Zealand decided to expand program to purchase assets up to NZD20 billion. The data released at the end of last week showed that trade surplus in New Zealand rose to NZD464 billion in March against the level of NZD194 billion in February. The level of trade surplus was substantially above the forecast of 200 billion, which is a positive indication for the economy. Export amounted to NZD4.53 billion last month against the forecast of 4.20 billion and imports totaled 4.07 billion versus to the expected 3.90 billion.